BACK - STEP

Stricken by an acute case of the Florida jitters, an erstwhile rebellious Congress once again appears willing to caper at the Administration's whistle. It could have chosen a much more propitious time than now when the Wage and Hours Bill is pending. From the sociological standpoint, the desire of this bill to aid those two million unfortunates working under sub-standard labor conditions is commendable. From the economic standpoint, it is a continuation of an unwise wage policy based on faulty economic reasoning which has been pursued by the last two administrations.

Early in the Great Depression, President Hoover pledged industrialists to maintain wages in spite of falling prices. Since he has assumed the whip, President Roosevelt has continually tried to force wages higher as a prosperity measure. Now, in immediate prospect is an increase to a flat nation-wide minimum of 40 cents an hour together with a 40 hour per week maximum. These measures have arisen out of a native confidence in under-consumption theories of depression. Two administrations have assumed that the path of roses to prosperity lies in boosting wage incomes so that laborers buy more.

They have blindly ignored the fact that increased wages mean increased costs of production. The only thing which can really revive business from a depression is profits, and higher costs destroy profits. Thus wage hikes are an effective barricade in the road of prosperity. At the present time we have the anomaly of an Administration spending $3,700,000,000 to drag business out of its doldrums and at the same time pushing it back with higher wages.

Wage legislation is socially desirable but this is not the hour for it. If it must pass, the bill should at least be modified from its uncompromising flat rate. A system of wage differentials for regions and industries, established by wage boards which have made individual investigations, might to some extent mitigate a situation of increased production curtailment and unemployment.